Bond buyouts

28 January 2011 By Neil Unmack Follow @unmack1

European buyout firms are changing the way they do deals. Acquisitions of Swissport and the Priory will be financed solely through bonds. Such deals highlight the shift towards a publiclytraded leveraged finance market, like in the U.S. But bond investors shouldn’t run too fast.

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PAI Partners raised 750 million Swiss francs ($791 million) through a highyield bond on Jan. 25 to finance its acquisition of Swissport, the world's largest passenger and handling company. The French private equity firm agreed to buy Swissport from Spanish infrastructure group Ferrovial last year. The bonds yield 7.875 percent, and were 10 times oversubscribed. Barclays, Citigroup, BNP Paribas and RBC were bookrunners.

Advent International raised 600 million pounds ($953 million) through a bond sale on Jan. 27 to finance its acquisition of Priory Group, the UK mental health group, from Royal Bank of Scotland. Deutsche Bank, Credit Suisse and Royal Bank of Scotland were bookrunners. The bonds were sold in two tranches, yielding 7 percent and 8.875 percent.

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